To put more money in your pocket, to reduce your income tax liability, to help budget for medical expenses not covered by your medical insurance or otherwise, this employer-established plan allows you to pay for specified medical expenses with pre-tax dollars.
The employee contributes funds to the account through a salary reduction agreement and is able to withdraw the funds set aside to pay for medical bills.
The salary reduction agreement means that any funds set aside in a flexible spending account escape both income tax and social security tax. Employers may contribute to these accounts as well. |
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